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2019 (11) TMI 1337 - AT - CustomsBenefit of nil rate of duty as per N/N. 64/88 dated 01.03.1988 - appellant submits that provisions of Section 28AB and Section 114A of the Customs Act 1962 were not on the Statute book at the time of import - HELD THAT - There is no doubt that the appellant have not been issued an installation certificate by the DGHS and the exemption certificate has also been cancelled. Therefore, they have not fulfilled the conditions of Notification No. 64/88. This Notification gives exemption to hospital equipment imported by specific category of hospitals subject to certification by DGHS. In case of provisional assessment, the relevant date is the date of finalisation of assessment. In this case, the assessments were finalised denying them the benefit of exemption notification and the differential duty has accrued consequently - It is found that the appellant is liable to pay the differential duty under Section 28. As far as the interest under Section 28AB and imposition of penalty under Section 114A of the Customs Act are concerned we find that both these provisions were not in existence at the time of import. The demand of interest under Section 28AB and imposition of penalty on the importer under Section 114A are not sustainable and need to be set aside - As far as the confiscation of imported goods which were provisionally released and imposition of redemption fine under Section 125 are concerned we find that under Section 111 several types of goods brought into India from a place outside India shall be liable to confiscation - appeal allowed in part.
Issues Involved:
1. Denial of benefit of Notification No. 64/88-Cus dated 01.03.1998 and consequent demand of customs duty. 2. Confiscation of medical equipment under Section 111(o) of the Customs Act 1962 and imposition of redemption fine. 3. Imposition of penalty on the importer under Section 114A of the Customs Act 1962. 4. Demand of interest under Section 28AB of the Customs Act 1962. 5. Imposition of penalty on the Director of the importing company under Section 112(a) of the Customs Act 1962. Detailed Analysis: 1. Denial of Benefit of Notification No. 64/88-Cus and Demand of Customs Duty: The appellant imported medical equipment claiming a 'Nil' rate of customs duty under Notification No. 64/88-Cus, supported by a duty exemption certificate from DGHS. However, DGHS later rejected the application and canceled the certificate. The department found violations of notification conditions and issued a demand notice for differential duty of ?7,33,306/-. The appellant's challenge to the DGHS decision was dismissed by the High Court and the Supreme Court. The tribunal concluded that the appellant did not fulfill the notification conditions, especially the installation certificate requirement, and upheld the demand for differential duty under Section 28 of the Customs Act 1962. 2. Confiscation of Medical Equipment and Imposition of Redemption Fine: The medical equipment, valued at ?6,50,382/-, was confiscated under Section 111(o) of the Customs Act 1962, with an option to redeem on payment of a ?1,00,000/- fine. The tribunal found that the goods were rightly confiscated as the appellant failed to meet the exemption notification conditions. The redemption fine was deemed appropriate considering the age and condition of the equipment. 3. Imposition of Penalty on the Importer under Section 114A: The appellant argued that Sections 28AB and 114A were not in effect at the time of import and thus could not be applied retrospectively. The tribunal agreed, referencing the Delhi High Court's decision in Diwan Chand Satya Pal Agarwal Imaging Research Centre Vs UOI, and set aside the penalty under Section 114A as it was not applicable retrospectively. 4. Demand of Interest under Section 28AB: Similarly, the tribunal found that Section 28AB, which mandates interest on duty demands, was not in effect at the time of import. Consequently, the demand for interest under Section 28AB was set aside. 5. Imposition of Penalty on the Director under Section 112(a): The Director was penalized ?1,00,000/- under Section 112(a) for improper importation. The tribunal upheld this penalty, finding it just and reasonable given the duty involved was ?7,33,306/-. Section 112(a) imposes penalties on individuals involved in acts leading to goods being liable for confiscation. Conclusion: The tribunal upheld the denial of the exemption benefit, the demand for differential duty, the confiscation of goods, and the penalties on the Director. However, it set aside the demand for interest under Section 28AB and the penalty under Section 114A due to their non-retrospective applicability. The appeals were disposed of accordingly.
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